U.S. IN NEW DRUG-MONEY PUSH

The Justice Department is refashioning its unit that prosecutes
financial institutions for money laundering and claws back the
proceeds of crime, to stanch the flow of money to violent Mexican
drug cartels and impound the assets of kleptocrats around the world.

The Asset Forfeiture and Money Laundering Section, part of the
department's Criminal Division, has quietly begun hiring a total of
10 prosecutors and lawyers for two groups that will focus on such efforts.

The hiring spree marks an escalation in the department's
anti-corruption mission, including U.S. obligations under
international pacts, such as the United Nations convention against
corruption. The convention requires member states to adopt stringent
anti-corruption laws and policies, including tracing and seizing
proceeds of crimes committed abroad.

The moves also represent a strategic shift in the department's role
in the Mexican drug war, which has claimed more than 22,000 lives
since 2006. Law enforcement officials have acknowledged that more
resources are needed to target U.S. financial institutions and
professional criminals moving drug cartels' money.

"A top priority is the Mexican cartels," said Jennifer Shasky, chief
of the section. "We're going after their money aggressively."

The department has had some success in this area in recent years.
Wachovia Bank NA reached a $160 million settlement with the
department in March over allegations that a failure in bank controls
allowed drug traffickers to launder money by transferring funds from
Mexican currency-exchange houses to the bank.

Prosecutors said the bank, which was acquired by Wells Fargo & Co. in
2008, processed a total of $420 billion in transactions without using
proper money-laundering detection. Department officials said the
penalty was the largest ever imposed on a U.S. bank under the Bank
Secrecy Act. Critics derided the settlement as picayune.

Ms. Shasky said the drug-cartel team will home in on professional
money launderers from such fields as law, accounting and money
transfer. She said the department is also working closely with Mexico
on investigations and helping to mentor prosecutors there. In
successful joint prosecutions, proceeds are typically split between
the countries.

The department is also engaging with other foreign governments that
have been victims of theft and high-level corruption under a new
program, the Kleptocracy Asset Recovery Initiative, which Attorney
General Eric Holder unveiled in a July speech in Uganda. For the
first time, a team of department lawyers will focus exclusively on
forfeiture actions against the assets of corrupt foreign officials
who stash criminal proceeds in the U.S.

In a high-profile example of the program's mission, the department in
July filed civil forfeiture complaints against U.S. properties of the
former Taiwanese President Chen Shui-bian and his wife, Wu Shu-Jen,
who were convicted in 2009 in Taiwan of bribery, embezzlement and
money laundering. Prosecutors say the properties were purchased with bribes.

The initiative coincides with a jump in U.S. enforcement of the
Foreign Corrupt Practices Act, which bans companies from bribing
foreign officials to obtain or keep business.

The particulars of the initiative are still being hashed out, but
department officials said the foreign bribery unit and the
kleptocracy unit will collaborate, raising the stakes for foreign
officials who escaped prosecution under the Foreign Corrupt Practices
Act, which targets only the offering of bribes by the private sector.

Robert Palmer of Global Witness, an international nongovernmental
organization that works to expose government officials who exploit
their countries' resources, said it was "fantastic" that the
department was devoting more attention to such issues, particularity
in developing countries that are losing vast amounts of money this way.

"However, I think it's also important to match this asset recovery
work with stopping these sorts of funds from getting into the
financial system in the first place," he said.